Amazon, Whole Foods, and the Retail Tech Flywheel

How Amazon can use its tech expertise to transform the in-store grocery shopping experience without shedding employees

We all know the experience of shopping at a grocery store.

The produce section. The meat section. Checking those little signs before walking down a long aisle. Maybe finding a store clerk to help you locate an item.

What if it could be different? What if Amazon could bring retail tech to the grocery shopping experience? Is this something customers would want? Would this improve the customer in-store experience?

What is retail tech anyway?

According to research firm CB Insights, retail tech is meant to help retailers “bridge the gap between digital and physical commerce, and keep up with e-commerce competitors”. It includes areas ranging from “shelf-stocking robots, to augmented reality displays, to Wi-Fi-based beacons that collect data on shopper behavior”.(CB insights).

I would like to focus on a few retail tech innovations that Amazon could use to improve the customer experience at Whole Foods.

  1. Digital and Interactive Displays — Gone are those little signs in the long aisles. Amazon could have connected digital signs to provide information about promotions and give other product information.
  2. Alexa and chatbots — Amazon owns the Echo and the Alexa voice service. Both of these could help quickly answer customer queries, such as item locations, shopping list suggestions, or dinner ideas without having to hunt down a store clerk or go searching through the store.
  3. Use Google VPS to instantly locate any item — What if all of a store’s items were already mapped out for you, and you could locate them on a map on your phone, just like GPS and Google Maps, but for places that are indoors? Google is currently working on that with its new Tango platform in a technology called VPS. Instead of having to ask a chatbot for the location of an item, or looking it up on a digital display, you could just look up an item on your phone and find that item. Pretty amazing.
  4. Machine learning and recommender systems help you shop — Knowing what to buy and how to budget can be hard. So can locating new and interesting ingredients and recipes. Maybe Amazon’s machine learning algorithms can help with that. They can recommend new foods and recipes based on your previous purchases. They can help with weekly or monthly food budgeting based on family size and how much you want to spend. As a software company, Amazon will have the ability to innovate in these areas in a way that Whole Foods and other grocery stores didn’t.

There’s a lot of talk recently about what will happen to the Whole Foods employees, and maybe Whole Foods will just become one big grocery store filled with robots, or one big Amazon Go with very few employees at all.

This is not how I think the situation will play out. Instead, as Tim O’Reilly points out, I think Amazon will use technology to do more.

This is part of what Jeff Bezos calls the flywheel. Technology could be used to create a better in-store experience and lower prices on products, leading customers to buy more. This then allows Amazon to grow faster, invest more in the company, and find new ways to innovate and satisfy customers, all in a self-reinforcing circle.

As for the fate of those cashiers or other jobs that might be displaced by retail technology, I think they will be freed up to improve the customer experience, or serve in other roles not well suited to technology.

Google VPS can find you the cheese section and maybe Amazon’s recommender algorithms can suggest certain varieties based on past purchases, but is that really the same as an expert suggestion from someone behind the counter?

As Tim O’Reilly pointed out, technology itself isn’t the problem. It’s the short-sighted use of technology to cut costs and fatten corporate profits.

If Amazon and other companies use technology to do things that were previously unimaginable, then there will be new ways to put people to work in Amazon-owned Whole Foods, or other companies that use technology to do more.